8456360 Alternative Energy

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Dan E. Arvizu

Director, National Renewable Energy Laboratory

Alternative Energy:Solar, Wind, Geothermal

Milken/Sandia Energy Workshop for Financial and Capital Market Leaders

October 23, 2007





How Big is the Challenge?

Source: Arvizu, NREL



U.S. Energy Consumption andthe Role of Renewable Energy

Source: Energy Information Administration,

Annual Energy Outlook 2006, Table D4



Thinking Differently:Account for Externalities

Today’s energy marketplacedoes not appropriately“value” certain publicobjectives or social goods,instead we have:

– Price volatility

– Serious environmentalimpacts

– Underinvestment in energyinnovation

http://www.wtrg.com/daily/clfclose.gif



Mounting Evidence



Source: Daniel Kammen, Gregory Nemet Reversing the Incredible, Shrinking Energy R&D Budget http://rael.berkeley.edu/files/2005/Kammen-Nemet-ShrinkingRD-2005.pdf

Table 10.3, Edition 25, Transportation Energy Data Book http://cta.ornl.gov/data/chapter10.shtml

U . S . R &

D S p e n d i n g i n t h

e E n e r g y S e c t o r

B i l l i o n s 2 0 0

2 $

Declining Energy R&D Investments

http://rael.berkeley.edu/files/2005/Kammen-Nemet-ShrinkingRD-2005.pdf


http://cta.ornl.gov/data/chapter10.shtml




Declining Energy R&D InvestmentsReflect World Oil Price Movement

Source: Daniel Kammen, Gregory Nemet Reversing the Incredible, Shrinking Energy R&D Budget http://rael.berkeley.edu/files/2005/Kammen-Nemet-ShrinkingRD-2005.pdf

Table 10.3, Edition 25, Transportation Energy Data Book http://cta.ornl.gov/data/chapter10.shtml

U . S . R &

D S p e n d i n g i n t h

e E n e r g y S e c t o r

B i l l i o n s 2 0 0

2 $

D ol l ar s p er B ar r el –2 0 0 2

$



http://cta.ornl.gov/data/chapter10.shtml




We Are Now Setting Aspirational Goals –Setting the Bar Higher

U.S. national goals

– Biofuels: reduce gasoline usage by 20% in ten years

– Wind: 20% of total provided energy by 2030

– Solar: Be market competitive by 2015 for PV and2020 for CSP



0%

5%

10%

15%

20%

25%

30%

2005 2010 2015 2020 2025 2030 2035 2040

High: Progressive policy change &

rapid technological advancement

Medium: moderate policy &

technological change

Low: minimal policy, slow

technological change, greater reliance

on fossil fuels

Fossil fuel price assumptions for the forecast year range from:

Oil: $21 - $100 per bbl

Coal: $20 - $25 per ton

Natural Gas: $4 – $8.03 per mcf

PEW AOGw/Policy

PEW TTT w/Policy

EPG 10% Renewables, Maintain Coal and Nuc

EPG 10% Renewables, Maintain Coal and Nuc, High Corns

EPG 10% RE Mod Gas Growth, High Cons

PEW TTW w/Policy

IEA WEOAlt Policy

PEW TT

IEA WEO Ref

EPG Current TrendEPG Inc Coal &Nuclear PEW TW

AEO Base

PEW AOG

EIA AEO High Econ Growth

EIA AEO Low En Price

EIA AEO Ref

EIA AEO Low Econ Growth

EIA AEO En Price

U.S. Renewable Energy ContributionsPercent of Total Electric Generating Capacity



Getting to “Significance” Involves

PoliciesMarkets

Reducing

Risk

Reducing

RiskMobilizing

Capital

MobilizingCapital

Technologies

Source: NREL



Global Markets are Growing Rapidly

Global PV Shipments

Global Growth of Wind Energy Capacity



Money Is Flowing Into the Sector

Source: New Energy Finance 2007

2006 Investment and M&A – By Sector and Asset Class

Annual VC Investment Volume – 2001-2004 Compared With 2005-2006



Investment and M&ABy Region and Asset Class – 2006

Source: New Energy Finance 2007

Figures in brackets represent total number

of deals. 2006 figure is annualized.



Total Estimated VC Investment by Region2001-2006

Source: New Energy Finance, January 2007

Figures in brackets represent deals (with

disclosed value/total number of deals). 2006

figure is annualized.



CALIFORNIA

Worldwide Markets Have Driven CostReductions – Solar PV Example

S P li F k



State Policy FrameworkRenewable Electricity Standards

Source: DSIRE database, July 2007



Energy Efficiency and Renewable EnergyTechnology Development Programs

Efficient Energy Use

• VehicleTechnologies

• BuildingTechnologies

• IndustrialTechnologies

Energy Delivery andStorage

• Electricity

Transmission andDistribution

• Alternative Fuels

• Hydrogen Deliveryand Storage

Renewable Resources

• Wind

• Solar

• Biomass

• Geothermal

N R E L R & D

P o r t f o l i o

Foundational Science and Strategic Analysis



Past Investments Have YieldedImpressive Cost Reductions



Technology Maturity Pathways

W i n d

S o l a r

B i o f u e l s

G e o t h e r

m a l



Wind

Long Term Potential• 20% of the nation’s electricity supply

NREL Research Thrusts

• Improved performance and reliability• Distributed wind technology• Advanced rotor development• Utility grid integration

Today’s Status in U.S.• 11,603 MW installed at end of 2006

• Cost 6-9¢/kWh at good wind sites*

DOE Cost Goals• 3.6¢/kWh, onshore at low wind sites

by 2012• 7¢/kWh, offshore in shallow water by

2014

* With no Production Tax Credit

Updated 1/07, validated 7/07Source: U.S. Department of Energy, American Wind Energy Association



Evolution of U.S. Commercial Wind Energy



Installed Wind Capacity



Cumulative Capacity-Weighted Average Wind Power Price Over Time

Wind Power Prices Are Up in 2006



Project Cost Increases Are a Functionof Turbine Prices

Reported U.S. Wind-Turbine Transaction Prices Over Time



Key Results from Major Wind Integration Studies Completed 2003-2006

Integrating Wind Into Power Systems

New studies find integrating wind into power systems ismanageable, but not costless



Some Additional ReservesMay Need to be Committed

Reserve Category Base 15% Wind 20% Wind 25% Wind

MW % MW % MW % MW %

Regulating 137 0.65% 149 0.71% 153 0.73% 157 0.75%

Spinning 330 1.57% 330 1.57% 330 1.57% 330 1.57%

Non-Spin 330 1.57% 330 1.57% 330 1.57% 330 1.57%

Load Following 100 0.48% 110 0.52% 114 0.54% 124 0.59%

Operating Reserve

Margin

152 0.73% 310 1.48% 408 1.94% 538 2.56%

Total Operating

Reserves

1049 5.00% 1229 5.86% 1335 6.36% 1479 7.05%

Estimated Operating Reserve

Requirement for MN BAs – 2020 LoadSource MN DOC

S l



Solar Photovoltaics and Concentrating Solar Power

NREL ResearchThrusts:

PV• Partnering with industry

• Higher efficiency devices• New nanomaterials applications

• Advanced manufacturing techniques

CSP• Next generation solar collectors

• High performance storage

Status in U.S.

PV• 565 MW

• Cost 18-23¢/kWh

CSP• 420 MW

• Cost 12¢/kWh

Potential:

PV• 11-18¢/kWh by 2010

• 5-10 ¢/kWh by 2015

CSP8.5¢/kWh by 2010

5-7¢/kWh by 2020

Source: U.S. Department of Energy, IEA, Solar

Energy Technologies Program Multi-Year Plan

2007

Updated July 2007

Focus on Module R&D



ModuleModule

Inverter Inverter

Installation,Engineering

Installation,Engineering

Mounting,Electrical

Mounting,Electrical

Focus on Module R&D . . .

R&D



90%

80%80%

Disruptive II 3rd Gen and beyond Quantum dotsNanotechnology

Multi-multi-junctionsThermophotonics, voltaicsIntermediate band . . .

70%70%60%60%

PV Module Production Experience (or “Learning”) Curve

P

V

M o d u l e

P r i c

e

( 2 0 0 4 $ / W p )1

Efficiencies beyond the

Shockley-Queisser Limit

(40% … 50% … beyond?)

Efficiencies beyond the

Shockley-Queisser Limit

(40% … 50% … beyond?)

DOE is the STEWARD

R&DEnsures technology ownership, enables growth, new markets

•

EPIA2030

EPIA2020

•

SEIA2020

80%•





RidgeRWE Schott Stillwell Avenue Subway

Station PV Canopy Roof 250 000



PowerLight PowerGuard® Rooftop System,536 kW, Toyota Motor Corp., Torrance, CA

Shell Solar at Semitropic Water Storage Dist.980 kW, single-axis tracking, Wasco, CA

WorldWater & Power, Irrigation System

267 kW, Seley Ranches, CA

Sun Power & Geothermal Energy Co.Solar-Wastewater Plant, 622 kW,Oroville,CA

Shell Solar, “Sunspot Bürstadt”, rooftop system,Grid tied, 5MW, Bürstadt, Germany

MovingToward Our Destination

RidgeVineyardsPV Rooftop65 kW, CA

Station, PV Canopy Roof, 250,000

kWh/yr, Brooklyn, NY

WorldWater & Power and Alternity Power Atlantic County Wastewater TreatmentPlant, 8 MW solar-wind hybrid, NJ

Powerlight, Bavarian community6.750 MW, single-axis trackingMühlhausen, Germany



GeothermalToday’s Status:• 2,800 MWe installed, 500 MWe

new contracts, 3000 MWe under

development

• Cost 5-8¢/kWh with no PTC

• Capacity factor typically > 90%,

base load power

DOE Cost Goals:

• <5¢/kWh, for typicalhydrothermal sites

• 5¢/kWh, for enhanced

geothermal systems with mature

technology

Long Term Potential:

• Recent MIT Analysis showspotential for 100,000 MW installed

Enhanced Geothermal Power systems

by 2050, cost-competitive with coal-

powered generation

NREL Research Thrusts:• Analysis to define the technology path to

commercialization of Enhanced Geothermal

Systems

• Low temperature conversion cycles

• Better performing, lower cost components

• Innovative materials

Source: DOE, NREL, 9/07

Enhanced Geothermal S stems (EGS)



Enhanced Geothermal Systems (EGS)for Electricity Generation

Source: DOE, August 2007



Enhanced Geothermal Systems HaveSignificant Potential

Source: DOE, August 2007



Technology Investment Pathways

Source: NREL

C



Technology Innovation Challenges RemainThe Next Generation

• Wind Turbines

– Improve energy capture by30%

– Decrease costs by 25%

• Biofuels – New feedstocks

– Integrated biorefineries

• Solar Systems – Improved performance

through, new materials, lower cost manufacturing

processes, concentration – Nanostructures

• Zero Energy Buildings – Building systems integration

– Computerized building energy

optimization tools



Promise of renewable energy isprofound and can be realized if we

• Aggressively seek a global sustainable energy

economy

• Accelerate investment in technology innovation

• Acknowledge and mitigate the carbon

challenge with the necessary policies

It is a matter of national will and leadership



The U.S. Department of Energy’s

National Renewable Energy Laboratory

www.nrel.gov

The U.S. Department of Energy’s

National Renewable Energy Laboratory

www.nrel.gov

G ld C l dG ld C l d

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8456360 Alternative Energy